Research Report on Papermaking Industry of China, 2018-2022

In recent years, with the development of Chinese economy, the papermaking industry has continued to grow. In 2000, the total output of paper and paperboard was about 30.5 million tons and increased to 125.42 million tons in 2017, with the CAGR up to 8.7% from 2000 to 2017.

According to the analysis of CRI, the sub-sectors of the papermaking industry present diverse prospects. With the rise of internet media, especially the popularity of mobile Internet apps, traditional printing media like newspapers, magazines and books have gradually declined in circulation, leading the demand for and production of newspapers to constantly drop. For another, the improvement in the living standards of Chinese residents has driven up the production of household paper. Also, the output of packaging paper is lifted by the development of logistics, especially the increase in express delivery, which is fostered by the growth of e-commerce.

The analysis of CRI shows that in recent years, wood pulp and waste pulp has taken up bigger shares in the raw materials for papermaking while non-wood pulp has been on the decline. Waste paper plays an increasingly important role in the development of the papermaking industry of China. The import volume of waste paper increased from 2.516 million tons in 1999 to 29.28 million tons in 2015 with the CAGR reaching 16.6% from 1999 to 2015. From 2016 to 2017, the amount of imported waste paper decreased due to the stricter policies of the government. Since Mar. 1st, 2018, Provision on Imported Waster Paper for Environmental Protection has taken effect. The new standards on the impurity rate of the imported paper have also been carried out, decreasing from 1.5% to 0.5%. The bar raised by the new standards poses great impacts on the amount and price of the imported waste paper. The new standard will lift the cost of sorting waste paper and thus affect its sales in China, the largest consumer in the world.

In terms of the approval of quotas for waste paper imports, many batches of small amount are adopted. Large enterprises like Panlong Paper, Liwen Paper, and Shanying Paper gain greater advantages to secure the quotas. In 2017, the top 5 papermaking enterprises obtained 62.6% of the quota. In 2018, the quota of large enterprises is expected to increase. Due to the decrease in imported waste paper, the price in the Chinese market will be lifted, which consequently drives up the cost of papermaking.

CRI report also indicates that Chinese papermaking enterprises are in great quantities in low market concentration. By the end of 2017, there were about 2,700 enterprises making papers and paper products with more than CNY 20 million in annual sales. The average annual capacity of those enterprises was less than 50,000 tons, far lagging behind the international level. In 2017, the number of enterprises which made paper of more than 1 million tons was less than 30.